Financial analysis

can leverage the purchase by paying with tax deductible margin interest. {noted in green ink] But not deductible margin against tax-exempt bonds. [/note]

But I still want to keep Wells Fargo:

1) I want to have continuity 2) They have the T-bill and it is insured by FDIC (and they don't charge $30 twice a year for it). 3) Good to have Express stop banking privileges throughout California [Noted to left of 1-3] I want to have a bank in California. [/note] 4) Nice to be able to keep checks; I wouldn't use the check listing facility anyway on CMA reports. 5) They have Tax-saver certificate which will eventually go into that account. 6) TBill has already started there for this quarter. 7) Pretentious + ostentatious to pay for things with Merrill Lynch check. [Noted in red] Key: I don't want to mail out Merrill Lynch CMA checks. I don't want to appear rich. [/note]

With the VISA card, I really don't need First Interstate, but it wouldn't hurt to have $300 available any time in the Western U.S.

But I would always use VISA CASH card first during the day since it comes from the big pool. But I still want 24 hour availability throughout the West Coast, and this is only via First Interstate.

It really does come down to no functional need for Wells Fargo accounts. 1) I don't need Express Stop if I have First Interstate, which I want so I have all 11 states for emergency night or weekend cash. 2) $10K TBill would be very safe as tax-free at Bond + is available 3) I will never live in that area again 4) I can leverage $10k maybe if I get a bond [noted in green ink] NO, but move it anyway for bigger return. [/note] ?5) Sending Merrill Lynch checks isn't that bad but do beware. 6) Continuity is just psychological. [noted in bottom margin] NO: it saves time not having to think about it. Like NOW: when to switch over? Late in 1/4? [/note] I may want a personal checking account, as when I had to pay Russell, or, especially, Les (for Reno).

[Noted in left margin] KEY But you don't need First Int for check cashing with CMA VISA card. Better to have WF + CMA, than Ready Assets + First Int! [/note]

So go ahead and keep it. Furthermore, Tax Saver has to have something to credit to.

But wasting $100 and suffering the hassle of shipping cash there to pay monthly bills with is nonsense.

But use it sparingly. Just do small checks and keep only about $400 there. But whenever I write a check to someone in person I'd feel self conscious about it. Like Doctors, dentists, would think you've got $$. So would your landlord!

So continue to use it for everything then. A personal checking account. But for reasons 2 + 4, and the reason that you don't otherwise have $20k to open, move the Tbill to Merrill Lynch.

To summarize. Reason to keep WF 1) Tax Savers will go into it 2) Prefer to write WF checks to doctors, friends, etc. 3) Retain Calif bank a) it is home (?) b) continuity with when I return c) personal banking [noted in red ink] and Express Stop too [/note] [noted in left margin] All together, it feels important. [/note]

But real money should be kept in someplace like Merrill. So move the T-bill and quit wasting all the taxable income in taxes. Thats 10k*13.056*.63 = $822/yr in taxes!

Only reason not to close it is tax saver which must stay there till I can withdraw it by writing check since it will fall into checking at maturity. Perhap Good?

Just don't bother with First Int Bank. You can get CASH nights + weekends in Cal via Wells Fargo. And with CMA card elsewhere. Just use your head to do it during the week.

THE 50% MAX TAX (and how deductibles/unearned income work)

THERE IS A QUESTION ABOUT HOW MUCH GOV'T PAYS FOR A MARGINAL DEDUCTIBLE OR TAKES FROM MARGINAL UNEARNED INCOME, GIVEN THAT MY EARNED "PERSONAL SERVICE" INCOME GOES UP TO THE 63% BRACKET. HAVING STUDIED FORM 4726, IT WORKS LIKE THIS:

INCOME 0 --- 50% bracket start: 41,500 --- PERSONAL --- TOTAL +u spread deductions + exemptions [arrow down] 0 --- 50% bracket starts: 41,500 --- PERSONAL loss --- TOTAL +u PERS -ded --------- * ded + exemp -exemp (TOTAL+u) + [delta] - [delta]

0 --- 41,500 --- PERS(1-(ded+exemp+[delta])/(TOTAL +u)) --- TOTAL +u -ded -exemp -[delta]

0 --- 41,500 --- PERS*(TOTAL+u-[delta]-ded-exemp) --- TOTAL +u --------------------------------------------------- -ded - exemp TOTAL + u -[delta]

0 --- 41,500 --- PERS * TX + u + [delta] --- TOTAL -[delta] +u -------------------------------TOTAL + u \--------/ \---------------/ \------------------------/ fixed 50% of this pay the difference; ie amount TAX(TC)-TAX((Pers*TC)/TOTAL) /\ So this is still in the high brackets.